Risky Decisions – Achieving our objectives by managing risk

Innovation; Research

Managing-risk-page-image

Everything we do is risk management. It may seem a bold statement, but it is true. We may not be aware of it, but every time we make a decision to: write a plan, have a nap, get in a car, save money, spend money – we are aiming to mitigate the risks to us achieving our goals and objectives.

In our role as leaders we can use tools and techniques to capture the details behind these risk management decisions we make. This enables us to prioritise the scarce resources at our disposal as well as show why we make the decisions we do and how they give us the best chance to achieve our, often conflicting, objectives.

It is tempting to capture everything that can go wrong as a risk. To avoid this we should aim to keep to a few high-level risks with potential significant impacts to our objectives. Some things we think are risks may actually be causes of one or more key risks and we can show them as such.

Therefore, when we capture risks we need to ensure the detail captured demonstrates a thorough understanding of what the causes and consequences are. We can then clearly state what controls are already in place and managing these. We should also capture any potential positive consequences of a risk.

By focussing on what is tolerable within our objectives we can use this as a threshold for assessing risks. A common mistake is to assess the likelihood of a small breach (it's almost certain that absenteeism to some degree will occur) and then to assess the impact of a catastrophe (if all the students are away for a week the consequences are huge). To help understand the tolerability, we can ask, "What keeps me awake at night?" or "What will be significant to the school council?"

Assessing a risk can become very scientific – it needn't. Relative assessment is more important than exact assessment. Working as a team we can ask: "Is this risk more likely than that one? Is the impact really going to be greater?" The reason we assess our risks is so that we can make informed decisions about the prioritisation of our limited resources. DEECD's risk framework provides a common language to help guide discussions with peers and colleagues to determine the relative assessments.

By looking at the full risk profile (for our school, campus, department etc.) decisions can be made about the treatments that can be put in place, or whether to accept and tolerate the risk. Across the profile there may be strategies that can improve the controls on more than one risk. It is here that we can now allocate our resources effectively based on the relative assessments of the risks.

DEECD's Enhanced Risk Management Policy applies to all Government schools and requires a systematic approach to risk management to be applied. Tools and techniques to help focus and improve risk processes are available on the Risk Management eduGate page. There are also some example registers with risks common to schools which can be tailored to your objectives.
https://edugate.eduweb.vic.gov.au/Services/Policies/RiskManagement/Pages/Home.aspx